CAHYA MATA SARAWAK BERHAD (Company No: T) (Incorporated in Malaysia) Interim Financial Report

Transcription

1 Condensed consolidated statements of comprehensive income for the year ended 31 March Note RM'000 RM'000 RM'000 RM'000 Revenue A8 490, , , ,239 Cost of sales (389,381) (286,506) (389,381) (286,506) Gross profit 101,608 86, ,608 86,733 Other income 7,196 2,383 7,196 2,383 Administrative expenses (20,905) (20,789) (20,905) (20,789) Selling and marketing expenses (3,884) (3,248) (3,884) (3,248) Other expenses (3,171) (1,650) (3,171) (1,650) Operating profit 80,844 63,429 80,844 63,429 Finance costs (655) (877) (655) (877) Share of results of associates 13,734 2,113 13,734 2,113 Share of results of joint ventures 1,087 1,526 1,087 1,526 Profit before taxation 95,010 66,191 95,010 66,191 Income tax expense B5 (23,996) (18,489) (23,996) (18,489) Profit for the period Other comprehensive income 71,014 47,702 71,014 47,702 Foreign currency translation, net of tax 12 (156) 12 (156) Share of other comprehensive expenses of associates, net of tax (11,605) (1,725) (11,605) (1,725) Other comprehensive income for the period, net of tax (11,593) (1,881) (11,593) (1,881) Total comprehensive income for the period, net of tax 59,421 45,821 59,421 45,821 Profit attributable to: Owners of the Company 57,423 38,896 57,423 38,896 Non-controlling interests 13,591 8,806 13,591 8,806 Total comprehensive income attributable to: CAHYA MATA SARAWAK BERHAD (Company No: T) (Incorporated in Malaysia) Interim Financial Report 3 months ended 3 months ended 71,014 47,702 71,014 47,702 Owners of the Company 47,466 37,084 47,466 37,084 Non-controlling interests 11,955 8,737 11,955 8,737 59,421 45,821 59,421 45,821 Earnings per share attributable to owners of the Company: sen sen (Restated) sen sen (Restated) Basic B Diluted The condensed consolidated statements of comprehensive income should be read in conjunction with the audited financial statements for the year ended 31 December 2014 and the accompanying explanatory notes attached to the interim financial report

2 Cahya Mata Sarawak Berhad (Company No: T) Condensed consolidated statement of financial position as at 31 March 2015 Unaudited Audited As at As at Note RM'000 RM'000 ASSETS Non-current assets Property, plant and equipment 618, ,214 Prepaid land lease payments 16,547 16,738 Land held for property development 319,651 61,815 Investment properties 6,678 5,626 Intangible assets 3,146 2,320 Goodwill 61,709 61,709 Investments in associates 403, ,945 Investments in joint ventures 2,483 1,395 Deferred tax assets 25,897 27,075 Other receivables 11,173 10,432 Investment securities 8,434 9,461 1,477,600 1,197,730 Current assets Property development costs 180, ,894 Inventories 123, ,520 Trade and other receivables 317, ,694 Other current assets 70,635 46,180 Investment securities 128, ,686 Tax recoverable 2,369 1,434 Cash and bank balances 739, ,590 1,562,699 1,567,998 Assets classified as held for sale 34,403 34,403 1,597,102 1,602,401 TOTAL ASSETS 3,074,702 2,800,131 EQUITY AND LIABILITIES Equity attributable to owners of the Company Share capital 519, ,752 Share premium 289, ,304 Other reserves (24,870) (15,329) Retained earnings 1,075,427 1,018,004 1,860,034 1,811,731 Non-controlling interests 274, ,802 Total equity 2,134,791 2,074,533 Non-current liabilites Deferred tax liabilities 39,303 39,070 Loans and borrowings B7 37,142 30,177 Trade and other payables A14 234,433 16, ,878 86,136 Current liabilities Income tax payable 26,963 21,224 Loans and borrowings B7 89,695 74,619 Trade and other payables 469, ,364 Other current liabilities 43,225 23, , ,462 Total liabilities 939, ,598 TOTAL EQUITY AND LIABILITIES 3,074,702 2,800,131 Net assets per share attributable to ordinary owners of the Company (RM) The condensed consolidated statement of financial position should be read in conjunction with the audited financial statements for the year ended 31 December 2014 and the accompanying explanatory notes attached to the interim financial report

3 Cahya Mata Sarawak Berhad (Company No: T) Condensed consolidated statement of changes in equity for the period ended 31 March 2015 Equity, total Equity attributable to owners of the Company < Attributable to Owners of the Company > < Non-distributable > Share capital Share premium Other reserves Distributable Retained earnings Noncontrolling interests RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1 January ,074,533 1,811, , ,304 (15,329) 1,018, ,802 Profit net of tax 71,014 57, ,423 13,591 Other comprehensive expense, net of tax (13,311) (11,675) 0 0 (11,675) 0 (1,636) Total comprehensive income 57,703 45, (11,675) 57,423 11,955 Transaction with owners:- Grant of equity-settled share options to employees 2,252 2, , Exercise of employee share options (118) 0 0 Total transactions with owners 2,555 2, , At 31 March ,134,791 1,860, , ,521 (24,870) 1,075, ,

4 Cahya Mata Sarawak Berhad (Company No: T) Condensed consolidated statement of changes in equity for the period ended 31 March 2014 Equity, total Equity attributable to owners of the Company < Attributable to Owners of the Company > < Non-distributable > Share capital Treasury shares Share premium Other reserves Distributable Retained earnings Noncontrolling interests RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 At 1 January ,887,706 1,654, ,704 (3,629) 448,663 14, , ,589 Profit net of tax 47,702 38, ,896 8,806 Other comprehensive expense, net of tax (1,880) (1,811) (1,811) 0 (69) Total comprehensive income 45,822 37, (1,811) 38,896 8,737 Transaction with owners:- Grant of equity-settled share options to employees Exercise of employee share options 1,272 1, ,208 (513) 0 0 Liquidation of a subsidairy (275) 0 Sale of treasury shares 5,743 5, , ,114 0 Total transactions with owners 7,444 7, ,629 1, ,839 0 At 31 March ,940,972 1,698, , ,871 12, , ,

5 Cahya Mata Sarawak Berhad (Company No: T) Condensed consolidated statement of cash flows for the year ended 31 March months ended 3 months ended RM'000 RM'000 Profit before taxation 95,010 66,191 Adjustments for non-cash items: Non-cash items (11,551) 2,792 Operationg cash flows before changes in working capital 83,459 68,983 Changes in working capital Increase in current assets (341,665) (17,307) Increase/(decrease) in current liabilities 186,611 (12,661) Cash flows (used in)/from operations (71,595) 39,015 Interest received 1, Interest paid (636) (871) Income tax paid, net of refund (17,809) (17,607) Net cash flows from operating activities (88,872) 21,487 Investing activities Purchases of investment securities (15,082) (7,114) Dividends from investment securities 5,854 5,111 Additional investment in associates 0 (10,260) Acquisition of property, plant and equipment (33,488) (10,039) Additional investment in investment properties (1,081) 0 Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment securities 17,058 5,776 Redemption of redeemable preference shares 4,267 0 Others (985) 1,399 Net cash used in investing activities (23,398) (14,925) Financing activities Drawdown/(repayments) of borrowings 22,040 (15,154) Proceeds from disposal of treasury shares 0 5,743 Proceeds from exercise of employee share options 303 1,272 Net cash used in financing activities 22,343 (8,139) Net decrease in cash and cash equivalents (89,927) (1,577) Cash and cash equivalents as at 1 January 829, ,708 Cash and cash equivalents as at 31 March 739, ,131 Cash and cash equivalents as at 31 March comprised the following: Cash and short term funds 739, ,131 Bank overdrafts , ,131 The condensed consolidated statement of cash flows should be read in conjunction with the audited financial statements for the year ended 31 December 2014 and the accompanying explanatory notes attached to the interim financial report

6 Part A Explanatory notes pursuant to MFRS 134 A1. Basis of preparation These condensed consolidated interim financial statements, for the year ended 31 March 2015 are unaudited and have been prepared in accordance with MFRS 134 Interim Financial Reporting issued by the Malaysian Accounting Standards Board ( MASB ), and Paragraph 9.22 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. These condensed consolidated interim financial statements also comply with IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board. These condensed consolidated interim financial statements should be read in conjunction with the audited financial statements for the year ended 31 December The explanatory notes attached to these condensed consolidated interim financial statements provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the year ended 31 December A2. Changes in accounting policies The significant accounting policies adopted by the Group in these condensed consolidated interim financial statements are consistent with those of the audited financial statements for the year ended 31 December 2014, except with the adoption of the following Malaysian Financial Reporting Standards ( MFRS ), IC interpretations and Amendments to MFRSs and interpretations. Amendments to MFRS 119: Defined Benefit Plans - Employee Contributions Annual Improvements to MFRSs Cycle Annual Improvements to MFRSs Cycle The initial application of the above is not expected to have any material financial impact on the Group s results. A3. Seasonal or cyclical factors The business operations of the Group are generally non-cyclical or seasonal. Ordinarily, however, there is a lower level of activity during the 1 st quarter of the year. A4. Unusual items due to their nature, size and incidence There were no unusual items affecting assets, liabilities, equity, net income or cash flows of the Group for the period ended 31 March

7 A5. Changes in estimates There were no changes in estimates that have had a material effect on the current quarter s results. A6. Debt and equity securities During the financial quarter ended 31 March 2015, the Company issued 408,300 ordinary shares of RM0.50 each for cash pursuant to the Company s Employee Share Option Scheme at exercise prices of RM0.74 and RM0.75 per ordinary share. A7. Dividends paid There was no dividend paid during the quarter ended 31 March THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK - 7 -

8 A8. Segmental information 3 months ended RM 000 RM 000 Segment Revenue Cement 143, ,477 Construction materials & trading 222, ,768 Construction & road maintenance 126,798 86,663 Property development 16,540 29,278 Samalaju development # 2,205 2,175 Strategic investments * 2,389 2,744 Others 8,007 7,696 Total revenue including inter-segment sales 522, ,801 Elimination of inter-segment sales (31,184) (20,562) 490, ,239 Segment Results Operating profit/(loss): Cement 29,374 20,436 Construction materials & trading 30,322 12,383 Construction & road maintenance 25,129 16,339 Property development 2,655 18,698 Samalaju development # (725) 3,597 Strategic investments * - (986) Others ,762 70,533 Unallocated corporate expenses (6,573) (7,981) Share of results of associates 13,734 2,113 Share of results of joint ventures 1,087 1,526 Profit before tax 95,010 66,191 Income tax expenses (23,996) (18,489) Profit for the year 71,014 47,702 # Lodging and catering services. * Financial services and education. A9. Changes in composition of the Group There have been no changes in the composition of the Group for the quarter ended 31 March

9 A10. Fair value of instruments (a) Determination of fair value Set out below is a comparison of the carrying amounts and fair values of the Group s financial instruments, by class, which are not carried at fair value in the financial statements. It does not include those short term/on demand financial assets and financial liabilities where the carrying amounts are reasonable approximation of their fair values: 31 March March 2014 Carrying Amount Carrying Amount Carrying Amount Fair Value RM 000 RM 000 RM 000 RM 000 Financial assets: Available-for-sale financial assets: - Equity instruments Redeemable participating shares 8,134 8,134 6,924 6,924 8,434 8,434 7,224 7,224 Financial liabilities: Interest-bearing loans and borrowings - Bankers acceptances 34,504 34,504 31,576 31,576 - Term loan 42,604 75,049 32,080 32,174 - Finance lease liabilities Revolving credits 44,000 44,000 15,000 15,000 - Loans from corporate shareholders 5,728 6,491 6,280 7, , ,044 84,948 86,111 (b) Fair value hierarchy The Group classifies fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 - Quoted prices in active markets for identical assets or liabilities, Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3 - Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

10 A10. Fair value of instruments (contd.) (b) Fair value hierarchy (contd.) As at the reporting date, the Group held the following financial assets and liabilities that were measured at fair value by level of fair value hierarchy: Level 1 Level 2 Level 3 Total RM 000 RM 000 RM 000 RM March 2015 Financial assets Income debt securities fund - 62,600-62,600 Equity instruments 38, ,083 Unit trust funds 27, ,843 Wholesale fund ,464 65,926 62, , March 2014 Financial assets Income debt securities fund - 59,252-59,252 Equity instruments 41, ,149 Unit trust funds 28, ,493 Wholesale fund - 1,464-1,464 69,642 60, ,358 There have been no transfers between any levels during the current interim period and the comparative period. A11. Capital commitments The amount of commitments not provided for in the interim financial statements as at 31 March 2015 was as follows: RM 000 Approved and contracted for: - Property, plant and equipment 159,682 - Others 10, ,809 Approved and not contracted for: - Property, plant and equipment 204,581 - Intangible assets Investment properties 37,500 - Investment in associates 114,609 - Others 18, , ,

11 A12. Changes in contingent liabilities and contingent assets There were no changes in the contingent liabilities or contingent assets since the last annual reporting date. A13. Related party transactions The following table provides information on the transactions which have been entered into with related parties during the three-month period ended 31 March 2015 and 31 March 2014 as well as the balances with the related parties as at 31 March 2015 and 31 March 2014: Interest/ fee income from/sales to related parties Purchases from/payment for services to related parties Amounts owed by related parties Amounts owed to related parties RM 000 RM 000 RM 000 RM 000 Associates: - Kenanga Investment Bank Bhd COPE-KPF Opportunities 1 Sdn KKB Engineering Bhd Harum Bidang Sdn Bhd ,382-24, ,551-36,442 - Kenanga Investors Bhd , , Key management personnel of the Group: - Directors interest , , , ,563 8 All outstanding balances with these related parties are unsecured and are to be settled in cash within the financial year. A14. Trade and other payables The significant increase in non-current trade and other payables was mainly due to land premium on alienation in Samalaju, Bintulu

12 A15. Subsequent event There was no material event subsequent to the statement of financial position date that has not been reflected in the quarterly financial statements other than as follows: On 26 March 2015, the Company announced that its wholly owned subsidiary, Samalaju Industries Sdn. Bhd. ( SISB ), has entered into a Share Sale Agreement with OM Materials (S) Pts. Ltd., a wholly owned subsidiary of OM Holdings Ltd., for the purchase of an additional 5% equity interest in the Ferrosilicon and Manganese alloys smelting project in Samalaju Industrial Park. Under the terms of the Share Sale Agreement, the consideration payable by SISB to OMS for this transfer is USD18.45 million. The transaction was completed in April 2015 and SISB s interest in this project has increased from 20% to 25%. THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

13 Part B Explanatory notes pursuant to Appendix 9B of the Listing Requirements of Bursa Malaysia Securities Berhad B1. Review of performance Quarter 1, 2015 ( 1Q15 ) vs Quarter 1, 2014 ( 1Q14 ) Group revenue rose 32% to RM million in 1Q15 from RM million in 1Q14, while profit before tax ( PBT ) grew by 44% to RM95.01 million from RM66.19 million in 1Q14. The main contributors to Group revenue and Group PBT were the Construction Materials & Trading, Cement and Construction & Road Maintenance Divisions, which altogether made a combined contribution of 94% and 90% of Group revenue and Group PBT respectively. The Cement Division recorded a 44% increase in PBT of RM29.37 million in 1Q15 over 1Q14 s PBT of RM20.44 million. The improvement was attributed to higher cement sale volume due to the continued growth of cement demand in the State, improved operational efficiencies, lower volume of cement imported and higher volume of cement and clinker produced by the Division. The Construction Materials & Trading Division s PBT in 1Q15 rose by 145% to RM30.32 million from RM12.38 million in 1Q14. This was primarily due to the strong revenue from greater sales volume of quarry aggregates and premix, as well as a rise in contract work and services, arising from the spill-over projects from The trading business also saw higher revenue and gross profit margin and helped boost the Division s PBT. The Construction & Road Maintenance Division posted a PBT of RM26.22 million which included the share of profit of joint ventures in 1Q15, representing an increase of 47% over 1Q14 s profit of RM17.86 million. The higher PBT was on the back of more works undertaken and longer road length maintained. The Property Development Division s PBT declined to RM2.66 million in 1Q15 from a PBT of RM18.70 million in 1Q14, a decrease of 86%. The higher PBT in 1Q14 was due to the land sale recognised. The Samalaju Division registered a minimal loss of RM725,000, from a PBT of RM3.60 million (excluding the associates) in 1Q14, due to higher costs. The Strategic Investments Division (excluding the listed associates) reported a marginal loss in 1Q15 from a loss of RM986,000 in 1Q14. The education company reported a slightly lower loss in 1Q15. The investment company recorded a higher PBT of RM1.07 million in 1Q15 from a PBT of RM70,000 in 1Q14. B2. Material changes in profit before tax for the quarter (Quarter 1, 2015 vs Quarter 4, 2014) The Group s revenue for 1Q15 was 3% lower than for 4Q14. Notwithstanding the lower revenue, the Group s PBT in 1Q15 was 31% higher than 4Q14. This was attributed to higher share of profits from associates, lower overhead expenses and improved operational efficiencies. All the Divisions except the Samalaju Division reported higher PBT in 1Q15 as compared to the preceding quarter

14 B2. Material changes in profit before tax for the quarter (Quarter 1, 2015 vs Quarter 4, 2014) (contd.) The Cement Division s sales volume in first quarter is normally lower than the fourth quarter in view of rainy season and long festive break. 1Q15 was no exception with 11% lower sales volume than 4Q14. However, the Division s PBT expanded marginally from RM28.07 million in 4Q14 to RM29.37 million in 1Q15. The contributing factors were:- (a) (b) (c) Cost of clinker produced was lower as the clinker plant operation was more stable; Higher proportion of own cement sold ; and PBT in the preceding quarter was affected by stock write-down adjustments, impairment of receivables and write-off of foundation work for aborted project. The Construction Materials & Trading Division s PBT increased by 17% to RM30.32 million from RM25.88 million in 4Q14. This was attributable to higher sale revenue from quarrying aggregates and lower overhead expenses. The Construction & Road Maintenance Division s PBT was up by 9% from RM24.01 million in 4Q14 to RM26.22 million in 1Q15. The Property Development Division recorded a PBT of RM2.66 million as compared to a loss of RM427,000 in 4Q14. The Strategic Investment Division (excluding the associates) registered a marginal loss in 1Q15 from a loss of RM1.77 million in 4Q14. B3. Prospects for the year ending 31 December 2015 Whilst the operating environment faced by the Group will remain challenging, the Board expects that the Group s financial performance to be good for year ending 31 December The Group s strong financial position will enable the Group to invest in new business opportunities especially in Sarawak. B4. Profit forecast or profit guarantee Not applicable as there was no profit forecast nor profit guarantee issued. THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

15 B5. Income tax expense 3 months ended RM 000 RM 000 Current income tax: - Malaysian income tax 24,129 18,457 - Over/(under) provision in respect of previous years - - Deferred tax (133) 31 Total income tax expense 23,996 18,488 The effective tax rate for the quarters ended 31 March 2015 and 31 March 2014 were higher than the statutory tax rate principally due to the losses of certain subsidiaries which cannot be set off against taxable profits made by other subsidiaries. B6. Corporate proposals Other than as disclosed below, there were no other corporate proposals that have been announced but not completed as at the date of this announcement. On 2 April 2015, the Company entered into a conditional share purchase agreement with the State Financial Secretary of Sarawak for the proposed acquisition of 42,435,817 ordinary shares of RM1.00 each in Sacofa Sdn. Bhd. ( Sacofa ) representing 50.0% of the issued and paid-up ordinary share capital of Sacofa for a total consideration of RM186,790,429 to be satisfied entirely in cash. The proposed acquisition is subject to a due diligence and other conditions that are precedents. It is not subject to shareholders approval and is expected to be completed by the second half of THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

16 B7. Borrowings As at As at RM 000 RM 000 Secured Revolving credits 14,000 14,000 Unsecured Revolving credits 30,000 - Bankers acceptances 34,504 38,708 Term loan 42,604 46,360 Loan from corporate shareholder 5,729 5,728 Total 126, ,796 Maturity Repayable within one year 89,695 74,619 One year to five years 37,142 30,177 5 years or more , ,796 All borrowings were denominated in Ringgit Malaysia. B8. Off balance sheet financial instruments As at the date of this report, there are no financial instruments with off balance sheet risks entered into by the Group. B9. Derivatives There were no derivatives entered into by the Group as at the end of the quarter under review. B10. Gains/losses arising from fair value changes of financial liabilities There were no gains/losses arising from fair value changes of financial liabilities. B11. Changes in material litigation There were no changes in material litigation since the last annual statement of financial position date of 31 December

17 B12. Dividend payable No interim dividend has been declared for the financial period ended 31 March 2015 (31 March 2014: Nil). B13. Earnings per share Basic earnings per share amounts are calculated by dividing profit for the period, net of tax, attributable to the owners of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share amounts are calculated by dividing profit for the period, net of tax, attributable to the owners of the Company by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. The following reflect the profit and share data used in the computation of basic and diluted earnings per share: 3 months ended (Restated) Profit net of tax attributable to owners of the Company used in the computation of earnings per share (RM 000) 57,423 38,896 Weighted average number of ordinary shares in issue ( 000) 1,039,763 1,020,700 Basic earnings per share (sen) Weighted average number of ordinary shares for diluted earnings per share computation ( 000) 1,042,159 1,029,633 Diluted earnings per share (sen) The comparative basic and diluted earnings per share have been adjusted to take into account the effect of the share split involving the subdivision of every one existing shares of RM1.00 each into two subdivided shares of RM0.50 each and the bonus issue of one share for every two subdivided shares resulting in the increase in the number of ordinary shares in June B14. Auditor s report on preceding annual financial statements The auditors report on the financial statements for the year ended 31 December 2014 was not subject to any qualification

18 B15. Additional disclosure on profit for the period Quarter Financial ended period ended RM 000 RM 000 Profit for the period is arrived at after charging/(crediting): Amortisation of intangible assets Amortisation of prepaid land lease payments Bad debt written off - - Property, plant and equipment written off 3 3 Depreciation of property, plant and equipment 12,153 12,153 Depreciation of investment properties (Gain)/loss on foreign exchange 1,488 1,488 (Gain)/loss on disposal of property, plant and equipment (44) (44) (Gain)/loss on disposal of investments (Gain)/loss on fair value changes of derivatives - - Impairment loss on trade receivables - - Interest expense Interest income (1,168) (1,168) Inventory written off - - Net fair value changes in investment securities (3,728) (3,728) Reversal of allowance for impairment loss on trade receivables (853) (853) Reversal of allowance for obsolete inventory - - Write down of inventory - - B16. Realised and unrealised profits/losses As at 31 March 2015 RM 000 As at 31 December 2014 RM 000 Total retained earnings of the Company and its subsidiaries: - Realised 1,144,018 1,086,361 - Unrealised (11,859) (13,731) 1,132,159 1,072,630 Total retained earnings from associates: - Realised (2,078) (585) - Unrealised 4,836 6,020 2,758 5,435 Total retained earnings from jointly controlled entities: - Realised 4,072 1,395 1,138,989 1,079,460 Add: consolidation adjustments (63,562) (61,456) Total Group retained earnings as per consolidated accounts 1,075,427 1,018,004